Commercial Bank Layout Blockchain: Empowering Financial Scenes to Solve Two "Pain Points"

Reporter Yang Jingxin and Ci Yupeng reported in Beijing

Source: China Business News

As the central government pointed out that blockchain technology is an important breakthrough for independent innovation of core technologies, the application of commercial banks in the field of blockchain technology has received unprecedented attention. Previously, state-owned big banks, stock companies and some city commercial banks all had projects on the application of blockchain technology. However, the application scenarios and exploration directions of banks are different, and the application value of large-scale industries is still not fully reflected.

According to the "China Business News" reporter, due to the characteristics of distributed accounting and anti-tampering of blockchain, it plays an important role in solving the two "pain points" of bank business efficiency and trust. From the perspective of technology application, most banks explore more in liquidation, supply chain, and cross-border trade, and there are also banks that combine the identification of identity information and digital currency.

Market participants said that the application of blockchain technology in the financial sector can improve efficiency, increase the cost of fraud in the business, and reduce the financing rate. This can help the bank's "anti-risk" and solve the "funding difficulties" and "funding expensive". effect.

The six major national banks "touch the chain"

On October 18th, the National Network Information Office released the second batch of blockchain information service filing list, with a total of 309 domestic blockchain information service names and filing numbers. The two batches of filing lists involve a total of 14 blockchain services, including ICBC, Ping An Bank, Zheshang Bank, Jiangsu Bank, Weizhong Bank and Suning Bank.

It is understood that state-owned banks have explored the application of blockchain technology, and the types of business are relatively rich. In addition, state-owned blockchain technology focuses on building platforms, and the landing of individual projects is based on actual business needs.

According to ICBC, the bank took the lead in setting up a blockchain laboratory in the industry to accelerate the development of technology research and industrial innovation. After three years, it has built blocks serving the real economy in various fields such as government affairs, industry and people's livelihood. Chain service system. In 2018, ICBC released an enterprise-level blockchain technology platform with independent intellectual property rights. At present, it has achieved more than 60 core technological breakthroughs and submitted 41 patents for fund collection, fund clearing, fund disbursement, and bank-enterprise interconnection. Wait for more than 60 scenes.

The reporter learned that ICBC is the first commercial bank to build a platform for precision poverty alleviation blockchain in the industry. Through this technology, the management of poverty alleviation funds is efficient and transparent. At present, the poverty alleviation fund has allocated nearly 5,000 loans, and the amount allocated has exceeded 7 billion yuan. At the same time, the bank also launched the ICBC e-mail network financing financial service platform by means of blockchain technology to realize the trust transfer and circulation of the core enterprise accounts receivable among the suppliers. The first month of the online registration has been registered, including China Railway and China Merchants. A number of supply chain companies have issued a total of 610 million yuan in bank loans, and the transaction turnover amounted to 500 million yuan.

ABC's application of blockchain technology is mainly focused on the “three rural” field. In August 2017, ABC used the underlying blockchain technology to launch the “e-chain loan” of the agriculture-related Internet e-commerce financing system, providing credit services such as order purchase, bulk credit, flexible pricing, automatic approval, fiduciary payment, and self-service repayment. . In this product, the blockchain technology mainly solves the problems of information asymmetry in agricultural credit business, high management cost and difficulty in crediting. At the same time, the bank also tried to use the blockchain technology for mortgage loans on agricultural land.

For the two state-owned banks of BOC and CCB, their blockchain technology is mainly used in the trade field. Bank of China's blockchain technology is mainly in the cross-border payment field. By establishing a cross-border blockchain platform, the information flow chain is realized, the query function is realized, the supervision node is added, and the interaction between the blockchain information and the actual transaction is realized. CCB's blockchain technology is applied to the trade factoring business. In January 2018, CCB's first international factoring blockchain transaction landed and became the first bank in China to apply blockchain technology to international factoring business.

In addition, the Postal Savings Bank launched its first blockchain-based asset escrow system in the banking industry as early as 2016. Since then, the “U-chain platform” has been launched in the field of trade finance to realize cross-bank domestic letter of credit in the entire process chain.

Bank of Communications' blockchain technology focuses on asset securitization, and has built the first asset securitization platform in the country, “chain blending”, which will involve original stakeholders, trusts, brokers, investors, ratings, accountants, lawyers, regulators, etc. Forming a coalition chain, connecting the fund end and the asset end, and using the blockchain technology to achieve credit penetration of the ABS business system.

Scene application frequently falls

For the application of new technology in blockchain, joint-stock banking projects have also been more frequent. At present, most of the stock companies have entered the blockchain, and the direction of power is different.

China Merchants Bank, which is known as the “king of retail”, has established the “China Merchants Bank Direct Payment Blockchain Platform”, which is the first cross-border direct-link clearing and global account unified view in the industry to apply blockchain technology to global cash management. And banks that collect these three scenarios from cross-border funds.

China CITIC Bank and Minsheng Bank jointly established the blockchain Forfeiting Transaction (“BCFT”) platform. Later, Ping An Bank joined the platform to upgrade and expand the platform. The online trading volume reached 20 billion yuan in one year. The industry has a strong response.

For the exploration of blockchain technology, Everbright Bank used the Fun Chain Technology blockchain platform in conjunction with China UnionPay in 2017 to build a multi-center trusted POS electronic purchase order system. According to the latest news, the bank also teamed up with Ant Financial to launch the “Double Chain Link” platform in Xiong’an New District. The platform is dedicated to solving the opaque information faced by traditional supply chain finance, the difficulty of conducting core enterprise credit, and the difficulty of financing small and micro enterprises. Issues such as financing and higher, improve the effectiveness, convenience and availability of financial services, and promote the new financial ecosystem of the entire industrial chain.

In addition, Industrial Bank announced the first pilot project to apply blockchain technology in 2017, the blockchain anti-counterfeiting platform. Zheshang Bank has created a “receivables chain platform”. Based on the Zheshang chain, the enterprise receivables in the blockchain are issued in the inter-bank market to support medium-term notes, helping enterprises to solve the problem of accounts receivable revitalization.

Compared with joint-stock banks, city commercial banks also have application attempts in specific businesses. It is understood that Jiangsu Bank and Wuxi Perception Group have cooperated to launch the IoT movable property pledge loan service. This behavior enhances the objectivity of regulatory data and uses blockchain technology to write original sensory information into the bank's “Su Yin Chain” platform to ensure data storage. Transmission, strengthen the post-loan management of the movable property pledge business, and enhance the risk management capability.

Among private banks, Weizhong Bank and Suning Bank have more prominent development and utilization of blockchain. Weizhong Bank launched the investment in blockchain technology in 2015, and in the following year initiated the establishment of the Financial Blockchain Cooperation Alliance (referred to as “Golden Chain Alliance”). In 2017, the Golden Chain Alliance Open Source Working Group launched the open source blockchain technology platform FISCO BCOS, which has more than 500 companies and institutions involved. Suning Bank mainly launched the movable property pledge financing platform in the exploration of the blockchain. Based on the blockchain technology, the bulk cargo warehousing records can be viewed in real time on the platform to enhance the bank's risk control capability in the front and back of the credit.

Efficiency and trust "pain point"

When commercial banks compete on the blockchain technology, the practical application of the blockchain in the business is concerned by the market. The reporter learned through interviews that due to the improvement in efficiency and trust, blockchain technology is mostly used in liquidation, cross-border trade, supply chain, information identification and digital currency, which can not only help banks enhance their risk control capabilities. It can also play a helping role in solving corporate financing difficulties and financing, which has become an important reason for the promotion of the application of this new technology.

“Weizhong Bank applied blockchain technology to liquidation, which solved the problem of high cost and error in previous business.” Micro-bank related people said that traditional bank reconciliation often requires T+1 or T+2 to complete. Moreover, the possibility of file loss is high. After using innovative technology, the blockchain reconciliation can confirm a batch of transactions, which not only ensures the consistency of records, but also records the flow of details through the block.

It is understood that since the micro-crowd bank used the blockchain technology in the clearing business, the scale of the cleared business has reached more than 20 million, and the zero error has been realized, which is impossible to achieve in the traditional reconciliation method.

The role of blockchain technology is even greater in solving the problem of trust. This involves a series of issues such as risk and pricing of banking business.

According to the research report of Orient Securities, the blockchain application scenario has three characteristics: “new database, multi-service entities, and mutual trust”. The blockchain is essentially a new type of time-stamped database. The data is real, effective, unforgeable, and difficult to tamper with. Blockchains are suitable for use in untrusted environments. At the technical level, the blockchain ensures that the data of the system is credible, the results are credible and the history is credible, especially for industrial applications where the collaborators are not credible, the interests are inconsistent or lack of authoritative third parties.

Gui Hefa, deputy dean of the Institute of Modern Finance of Jiangxi University of Finance and Economics, said that at present, the application of blockchain technology in finance is mainly in the aspect of supply chain finance, and also in other areas such as payment and settlement, poverty alleviation and so on. “In the area of ​​poverty alleviation, the use of blockchain technology can achieve peer-to-peer transactions, bypassing many intermediaries and giving money directly to beneficiaries.”

“Actually, the bank’s use of blockchain technology has not developed some underlying technologies, but uses this technology in combination with application scenarios to address industry pain points.” Liu Wei, director of Suning Bank’s company, told reporters.

He believes that the blockchain is a distributed accounting method. For example, there are 20 banks in China, each of which records the user's personal credit information on its own platform and records it on a shared blockchain. Accounts, there is no such data unique to a bank, but 20 banks have a set of such data, record the data information of all users, each has a backup, blockchain is the concept.

According to its introduction, Suning Bank's use of blockchain technology is based on business logic and business background. First of all, we will rely on the background of shareholders to integrate the resources of suppliers and distributors, and rely on shareholders to support more small and medium-sized suppliers. In this context, according to the basic business principles, there are receivable business, cargo business, prepaid business and so on.

“Whether it is cross-border business, supply chain business, or syndicated loan business, the biggest problem lies in the risk of information unreality. The bank's risk control system is a risk control model based on information, and information fraud brings to the organization. The risk is the biggest. The characteristics of the blockchain that cannot be tampered with information solve the trust problem, the risk assessment is more accurate, and it is also beneficial to pricing.” ICBC related sources said.